BLOOMFIELD HILLS, MI -- (Marketwired) -- 08/26/13 -- Michigan-based natural products developer Health Enhancement Products (OTCBB: HEPI) executed a series of transactions to acquire the assets and intellectual property of Wellness Indicators, Inc., from the primary lender and collateral agent -- Windsor, Ontario-based Essex Angel Capital (TSX VENTURE: EXC), a Tier 2 investment issuer listed on the Toronto Venture Exchange. Essex had previously exercised its rights on the assets in a Michigan federal court. The transaction was effective Monday, August 19 and presented to shareholders at the annual meeting in Detroit on August 21. The Board of Directors ratified the transaction on the same day in a special session of the board.
The Company has formed a Delaware limited liability corporation -- WellMetris, LLC -- as a wholly-owned subsidiary of HEPI, where the assets will be transferred to and from which WellMetris will operate.
The Company has looked to broaden its offerings over a set of related technologies. When approached by the lead investor and primary lender to purchase the assets of Wellness Indicators, Inc., a Michigan corporation engaged in the development of human metabolic testing, Company management realized that this could be a good fit for HEPI. The Wellness test panel measures inflammation and oxidative stress -- essentially monitoring some of the same biological processes as HEPI intends to address with its algal products. There is a repository of knowledge built up at HEPI, and within Wellness Indicators, that could benefit both.
Wellness testing is a viable concept. Most traditional medical diagnostics focus on uncovering the presence of disease or impairment, or measuring its severity. Wellness testing is just the opposite: Just as one can be a little sick, somewhat sick or terminally ill, an individual can also be merely free of disease, somewhat well, quite well or operating at peak metabolic efficiency. People who function at or near their personal best have fewer sick days, fewer at-work accidents, better personal productivity and fewer health insurance claims.
The Wellness Profile consists of a comprehensive collection, analysis and records management system that allows governments, employers and insurers to assess the wellness of largely asymptomatic population to more effectively focus prevention and intervention, thus lowering overall healthcare costs. The components of the system include a non-invasive urine test cartridge, a dedicated reader device, analytic software and a cloud-based HIPAA compliant records and meta-analysis application.
At the shareholder meeting, the Company presented a production-intent design for the human reader device, as well as a prototype for a bovine reader device to measure biomarkers for transition cow syndrome and bovine respiratory disease complex. A patent for bovine applications had been previously filed on June 15, 2013. This design concept is a ruggedized, outdoor version of the current reader device for use by dairy and beef producers.
The wellness tests form a counterbalance for the Company's algal products -- novel products in a related field that operates on a different business model, yet holds the same potential for extraordinary growth. Management believes the product can be in market within a few months and the underlying technology will allow the Company to create an entire product line of testing products for both human and animal use. "The science and technology of the Wellness product have already been proven and developed. We have commenced an engineering review, an upgrade to existing reader devices. We look forward to a rollout within 90 days with pre-sales starting immediately," states Andrew Dahl, Health Enhancement President and CEO.
For Essex Angel Capital, the transaction effectively replaces non-performing Wellness Indicators assets with $801,507 in HEPI common stock at $.31 per share. HEPI also funded $298,493 in cash to cover the logistical and legal expenses involved.
"Essex is very excited to complete the sale to HEPI," said Rick Galdi, Essex Chairman and CEO. "Our investment in metabolic wellness now has the opportunity to reach its full potential in the marketplace."
The Company formed WellMetris, LLC as a wholly-owned subsidiary of HEPI to function as a repository for the intellectual property and a funding vehicle that allows HEPI management to seek new capital without diluting HEPI shareholders. "The Company will look to raise equity capital while retaining a significant ownership stake. Outside investors will get a preferred return and maximized upside potential," states Philip Rice, Health Enhancement Chief Financial Officer.
As Mr. Dahl states, "Consider this unique premise: we now have a tool that measures oxidative stress, inflammation and autoimmune biomarkers, and we offer bioactive compounds that address oxidative stress, inflammation and autoimmune response. It's hand in glove. And it's applicable to both humans and animals."
As stated in the shareholder address, the Company has previous associations with the wellness technology. Health Enhancement President and CEO Andrew Dahl is one of two named inventors on the wellness panel patent application, and Health Enhancement CFO Phillip Rice served briefly as the Wellness Indicators, Inc. CFO before its managers moved the enterprise to Illinois where it subsequently ran aground. He is familiar with the business model and market potential.
The Company intends to begin manufacturing shortly after completion of its engineering review.
About Essex Angel Capital Inc.
Essex Angel Capital of Windsor, Ontario, is a publicly traded company engaged in the business of debt and equity investment in privately held early-stage companies. Essex is traded on the TSX Venture Exchange under the symbol "EXC."
About Health Enhancement Products, Inc.
Health Enhancement Products, Inc. (OTCBB: HEPI) is a Michigan-based health & wellness company engaged in the development of natural bioactive compounds for use as dietary supplements and food ingredients, as well as biologics for medicinal and pharmaceutical applications in humans and animals. The Company's scientific efforts are focused on the metabolic aspects of oxidation and inflammation, with a parallel program to validate and license products for healthy cholesterol balance.
Safe Harbor Statement
Except for any historical information, the matters discussed in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including the timing of completion of a trial, actual future clinical trial results being different than the results the company has obtained to date, and the company's ability to secure funding. Such statements are subject to a number of assumptions, risks and uncertainties. Readers are cautioned that such statements are not guarantees of future performance and those actual results or developments may differ materially from those set forth in the forward-looking statements. The company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information or otherwise.